The Spotify computer program will let people choose from any of 15 million songs to hear for free -- up to 10 hours per month, with each track listenable up to five times. For the first six months, however, people who enter during the invitation period are exempt from the monthly limit, Parks said.

After that, users can lift the restrictions by paying $5 a month or buying songs individually, like iTunes. The smartphone apps can be accessed for $10 a month, which includes unlimited streaming and the ability to save copy-protected music for listening offline.

The ability to create and share playlists with Facebook friends has formed a beehive mix-tape culture among the more than 10 million users in Europe.

From a small office in Stockholm, Sweden, Spotify quickly spread its tentacles across Europe. But during the past couple of years, the company has been caught in a web of bureaucracy. Record-label executives have expressed concern that Spotify's free offering devalues music and doesn't drum up significant revenue.

"They wanted to be careful," Parks said. "Spotify has always had a view that the free experience was core to what Spotify was all about and key to get users to invest in the service."

Spotify CEO Daniel Ek echoed that belief at a technology conference in December, as he has in several public appearances before that and likely will again at Fortune's Brainstorm Tech conference next week.

"We really believe in our model," Ek said at the D: Dive into Mobile conference last year. "We would not just launch a subscription model, because we don't think that's going to work."

Now, the four major labels and Spotify have finally settled their disputes. In the time since, the record companies have given the go-ahead to competing digital music initiatives such as Rdio, MOG and, most recently, Apple's iTunes Match.

"We think there's definitely room and appetite for a service like Spotify," Parks said. "There really is nothing like it in the market."